Downloading copyrighted content through file sharing services just became little more risky for Canadians.

The final part of Canada’s Copyright Modernization Act went into effect on Jan. 1, requiring Internet Service Providers (ISPs) and website hosts to relay notices of copyright infringement allegations to their customers.

While these notices don’t carry immediate legal ramifications, they serve as a warning that the copyright holder is aware of your IP address’ downloading activity and that legal action could follow.

Previously ISPs were able to decide if they wanted to inform their customers a copyright holder is aware of their illegal downloading. Internet service providers like Bell and Rogers have been periodically sending out these notifications for the last few years, but as of Jan. 1, doing so is now a legal requirement in Canada.

However, the new law introduces limitations on the amount of money a copyright holder can sue an individual for — $5,000 for downloading copyrighted material for personal use and $20,000 for downloading copyrighted content leading to commercial gain. According to the new law, customers receiving these notifications are also not told to remove the content from the Internet or their computer.

Since the cost of litigation is significant, it’s unlikely copyright holders will pursue illegal downloaders on an individual basis. Instead copyright holders will likely opt to take legal action against a large number of file sharers at once.

The ISP or website host is also forced to keep a record of the notification for six months in case the copyright holder decides to take legal action. However, customer personal information can’t be released to the copyright holder unless a lawsuit is launched. This means that while the major movie studio or record label might have the IP address of a file sharer, it won’t have their name or address until the decision to take legal action is made.

According to Michael Geist, a law professor at the University of Ottawa and Canada Research Chair for Internet and E-Commerce, all “demand letters” sent out to subscribers will also be reviewed by a case management judge before being landing in the email inbox of a subscriber. Each letter must also include a message in bold type that says, “no Court has yet made a determination that such subscriber has infringed or is liable in any way for payment of damages.”

This new system acts more as an educational tool to raise awareness regarding copyright infringements rather than as a way for copyright holders to troll regular Canadians downloading movies. Sending out copyright infringement notices has also proven to be a very successful deterrent in the past. In 2011, Rogers stated 67% of recipients of a single notice stop downloading copyrighted material, and that this number increases to 89% after a second notice.

Major Internet providers Bell and Rogers have confirmed to various media outlets that they will comply with the new law. According to the Leader-Post, two ISPs in Saskatchewan, SaskTel and Access Communications, have also confirmed they will abide by the new legislation.

Last year independent ISP Teksavvy was asked by Voltage Pictures, a Hollywood production company behind films like TheHurt Locker, to release the personal information behind 2,000 IP addresses the studio believes has illegally downloaded their films.

TekSavvy refused to release the requested information until a federal court order was issued. According to the Canadian Internet Policy & Public Interest Clinic, Voltage Pictures and TekSavvy are now in court over the legal cost related to TekSavvy releasing this information.

Teksavvy is asking to be reimbursed for “reasonable legal costs, administrative costs and disbursements,” according to legal documents related to the case. The ISP has also submitted a bill for $346,480.68 and Voltage Pictures has stated they’re opposed to the “outrageous” amount of money in TekSavvy’s request.

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